Everything Everywhere restructure leaves T-Mobile brand hanging

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Everything Everywhere CEO Olaf Swantee marked his first day on the job with a massive reshuffle of the brand’s senior management team in order to “streamline” the business. The fact that the new 10-strong team (slashed from 25) comprises far more Orange than pink is unlikely to be a coincidence.

In a remarkable move, Swantee has created a leadership team that does not include a single T-Mobile executive.

The shake up also saw the exit of several senior staff members – which does include some former Orange staff – but the departure of chief financial officer and deputy CEO Richard Moat is perhaps the most high profile.

Moat was credited as the executive that turned around T-Mobile before the Everything Everywhere merger, by restructuring to cut costs as it faced weak margins and struggled to compete with rivals Vodafone and O2.

He was also disregarded for the top Everything Everywhere job, when chief executive Tom Alexander (yes, another Orange veteran) resigned and was replaced with Swantee (you guessed it…).

Of those being promoted, the two new chief marketing officer roles – for consumer and business – are both being filled by Orange employees. I wonder how their T-Mobile counterparts, credited with the infamous flashmob series of TV ads, will feel about being overlooked?

Orange was always seen as the daddy brand when the two companies merged, not least because it simply has more customers and its CEO Tom Alexander was charged with running the venture.

Everything Everywhere is currently conducting a review into its consumer branding, which is expected to be completed in October. It could decide the fate of the T-Mobile brand.

The company is notoriously po-faced when it comes to answering questions about how the Everything Everywhere brand sits with consumers and whether there is still a place for the separate Orange and T-Mobile brands.

Indeed, Everything Everywhere plans to double the number of branded stores it has in the UK to more than 100, but still says it remains “committed” to keeping both the Orange and T-Mobile stores and brands.

The consumer branding review could of course lead to a number of outcomes, but Swantee’s swing of the axe yesterday (1 September) seems to suggest the way the T-Mobile brand might be going.

Earlier this year Everything Everywhere said its priority was to grow the number of contract customers it has in order to reduce its churn rate, which at 13% is already the lowest in the industry.

With this priority in mind, it seems clear Orange is going to be the forerunner in achieving the goal: Orange has the famous loyalty scheme (Orange Wednesdays), Orange has the business contracts and Orange has the kind of consumer contracts and bundle offers that will help Swantee achieve his other goal of pushing profitability to 25%, from the 20.2% margin it had in the first half of the year.

T-Mobile earns its crust by offering cheap deals to a young and relatively promiscuous (when it comes to brand loyalty at least) audience.

The new restructure further highlights that Everything Everywhere is hardly a marriage of equals. Under its new management team, the T-Mobile brand seems more likely to be hearing the death knell than wedding bells as the venture evolves.

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